Profit hit by FX swings

Nigeria’s insurance industry continues to post strong premium growth despite mounting macroeconomic pressures, as operators grapple with foreign exchange volatility, rising claims and tighter regulatory demands reshaping profitability.

Reflecting this trend, AXA Mansard Insurance Plc reported a 22 per cent increase in insurance revenue to ₦160.56 billion for the financial year ended December 31, 2025, even as profit weakened sharply due to currency-related impacts.

The insurer disclosed its audited results in Lagos, showing broad-based growth across its Property & Casualty, Life & Savings and Health businesses, underscoring resilience in a challenging operating environment.

Gross Written Premiums (GWP) rose by 23 per cent to ₦170.87 billion from ₦138.55 billion in 2024, driven by improved customer retention, new business acquisitions and an expanded distribution network.

A breakdown of the results showed Property & Casualty revenue grew by 11 per cent to ₦68.48 billion, Life & Savings rose 14 per cent to ₦25.77 billion, while the Health segment recorded the strongest growth, surging 40 per cent to ₦66.32 billion. Premiums across the segments also expanded significantly, with Health leading the growth trajectory.

Chief Financial Officer, Ngozi Ola-Israel, said the performance highlights strong execution across the company’s diversified portfolio, despite earnings pressure.
She explained that Profit Before Tax fell by 81 per cent to ₦6.12 billion from ₦31.69 billion in 2024, largely due to the absence of foreign exchange gains recorded in the previous year.

“In FY 2024, earnings were boosted by about ₦27 billion in FX gains, compared to a ₦1 billion FX loss in 2025. Adjusting for this, underlying profit would have grown by 50 per cent year-on-year,” she said.

Also speaking, Chief Executive Officer, Kunle Ahmed, noted that the company delivered strong topline growth and stable underlying earnings despite inflationary pressures and global uncertainties.

He added that the firm’s financial position remains strong enough to exceed new minimum capital requirements under Nigeria’s ongoing insurance reforms, noting that the board opted not to propose a dividend in order to strengthen capital buffers.

“In line with the new thresholds, our capital position exceeds ₦15 billion for non-life and ₦10 billion for life operations. Retaining earnings will further support our growth ambitions,” Ahmed said.

The company’s Insurance Service Result rose by nine per cent to ₦14.87 billion, supported by a 65 per cent increase in Property & Casualty earnings, although performance in Life & Savings and Health moderated due to higher claims and technical reserves.

Operating pressures persisted during the period, with insurance service expenses rising by 32 per cent, reflecting increased claims, particularly in general accident and aviation portfolios.

Despite the profitability dip, AXA Mansard maintained a strong balance sheet, with total assets growing by 18 per cent to ₦227.94 billion and shareholders’ funds rising by 11 per cent to ₦52.3 billion.

However, Profit After Tax declined by 98 per cent to ₦0.62 billion, impacted by FX losses and regulatory changes, including an increase in capital gains tax, which triggered a one-off deferred tax adjustment.

Industry analysts say the company’s performance mirrors broader trends in Nigeria’s insurance sector, where premium growth remains robust but bottom-line performance is increasingly shaped by macroeconomic headwinds, regulatory changes and claims inflation.
They note that the widening gap between revenue growth and profitability highlights the ongoing transition under IFRS 17 standards, which emphasise underwriting discipline and sustainable earnings over one-off gains.

Analysts also point to the rapid expansion of health insurance as a key driver of industry growth, supported by rising healthcare costs, growing awareness and increased corporate demand for employee coverage.

Looking ahead, AXA Mansard said it would focus on strengthening underwriting discipline, improving operational efficiency and deepening digital capabilities to sustain growth.
Ahmed expressed optimism that easing currency volatility and improving macroeconomic conditions would support a rebound in profitability.

“With a strong balance sheet and disciplined execution, we are well positioned to deliver long-term value,” he said.

Market watchers add that insurers able to balance growth with cost control, innovation and capital adequacy will be better placed as the industry moves toward consolidation and stricter regulation.